McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration in Finance (BBA Finance) .
| 101. |
Cash Discount term 3/15, net 40 means |
| A. | 3% discount if payment in 15 days, otherwise full payment in 40 days, |
| B. | 15% discount if payment in 3 days, otherwise full payment 40 days, |
| C. | 3% interest if payment made in 40 days and 15%,interest thereafter, |
| D. | none of the above. |
| Answer» A. 3% discount if payment in 15 days, otherwise full payment in 40 days, | |
| 102. |
If the sales of the firm are . 60,00,000 and the average debtors are . 15,00,000 then the receivables turnover is |
| A. | 4 times, |
| B. | 25%, |
| C. | 400%, |
| D. | 0.25 times |
| Answer» A. 4 times, | |
| 103. |
If cash discount is offered to customers, then which of the following would increase? |
| A. | sales |
| B. | debtors, |
| C. | debt collection period, |
| D. | all of the above |
| Answer» A. sales | |
| 104. |
Receivables Management deals with |
| A. | receipts of raw materials, |
| B. | debtors collection, |
| C. | creditors management, |
| D. | inventory management |
| Answer» B. debtors collection, | |
| 105. |
Which of the following is related to Receivables Management? |
| A. | cash budget, |
| B. | economic order quantity, |
| C. | ageing schedule, |
| D. | all of the above. |
| Answer» C. ageing schedule, | |
| 106. |
EOQ is the quantity that minimizes |
| A. | total ordering cost, |
| B. | total inventory cost, |
| C. | total interest cost, |
| D. | safety stock level. |
| Answer» A. total ordering cost, | |
| 107. |
ABC Analysis is used in |
| A. | inventory management |
| B. | receivables management |
| C. | accounting policies, |
| D. | corporate governance. |
| Answer» A. inventory management | |
| 108. |
If no information is available, the General Rule for valuation of stock for balance sheet is |
| A. | replacement cost, |
| B. | realizable value, |
| C. | historical cost, |
| D. | standard cost. |
| Answer» C. historical cost, | |
| 109. |
In ABC inventory management system, class A items may require |
| A. | higher safety stock |
| B. | frequent deliveries |
| C. | periodic inventory system |
| D. | updating of inventory records. |
| Answer» A. higher safety stock | |
| 110. |
Inventory holding cost may include |
| A. | material purchase cost, |
| B. | penalty charge for default, |
| C. | interest on loan, |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 111. |
Use of safety stock by a firm would |
| A. | increase inventory cost |
| B. | decrease inventory cost, |
| C. | no effect on cost |
| D. | none of the above. |
| Answer» A. increase inventory cost | |
| 112. |
Which of the following is true for a company which uses continuous review inventory system |
| A. | order interval is fixed, |
| B. | order interval varies, |
| C. | order quantity is fixed, |
| D. | both (a) and (c). |
| Answer» B. order interval varies, | |
| 113. |
EOQ determines the order size when |
| A. | total order cost is minimum |
| B. | total number of order is least, |
| C. | total inventory costs are minimum, |
| D. | none of the above. |
| Answer» C. total inventory costs are minimum, | |
| 114. |
ABC Analysis is useful for analyzing the inventories: |
| A. | based on their quality, |
| B. | based on their usage and value, |
| C. | based on physical volume, |
| D. | all of the above. |
| Answer» B. based on their usage and value, | |
| 115. |
If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ |
| A. | (2ao/c) 2 , |
| B. | 2ao/c |
| C. | 2a÷oc, |
| D. | 2aoc. |
| Answer» B. 2ao/c | |
| 116. |
Inventory is generally valued as lower of |
| A. | market price and replacement cost |
| B. | cost and net realizable value |
| C. | cost and sales value, |
| D. | sales value and profit. |
| Answer» B. cost and net realizable value | |
| 117. |
Which of the following is not included in cost of inventory? |
| A. | purchase cost |
| B. | transport in cost, |
| C. | import duty, |
| D. | selling costs. |
| Answer» D. selling costs. | |
| 118. |
Cost of not carrying sufficient inventory is known as |
| A. | carrying cost, |
| B. | holding cost, |
| C. | total cost |
| D. | stock-out cost |
| Answer» D. stock-out cost | |
| 119. |
Which of the following is not a benefit of carrying inventories |
| A. | reduction in ordering cost, |
| B. | avoiding lost sales, |
| C. | reducing carrying cost, |
| D. | avoiding production shortages. |
| Answer» C. reducing carrying cost, | |
| 120. |
Which of the following is not a standard method of inventory valuation? |
| A. | first in first out |
| B. | standard cost, |
| C. | average pricing, |
| D. | realizable value. |
| Answer» C. average pricing, | |
| 121. |
System of procuring goods when required, is known as, |
| A. | free on board (fob), |
| B. | always butter control (abc), |
| C. | jest in time (jit) |
| D. | economic order quantity. |
| Answer» C. jest in time (jit) | |
| 122. |
What is Economic Order Quantity? |
| A. | cost of an order, |
| B. | cost of stock |
| C. | reorder level, |
| D. | optimum order size. |
| Answer» D. optimum order size. | |
| 123. |
The type of collateral (security) used for short-term loan is |
| A. | real estate, |
| B. | plant & machinery, |
| C. | stock of good, |
| D. | equity share capital |
| Answer» C. stock of good, | |
| 124. |
Which of the following is a liability of a bank? |
| A. | treasury bills, |
| B. | commercial papers, |
| C. | certificate of deposits, |
| D. | junk bonds. |
| Answer» C. certificate of deposits, | |
| 125. |
Commercial paper is a type of |
| A. | fixed coupon bond |
| B. | unsecured short-term debt |
| C. | equity share capital, |
| D. | government bond |
| Answer» B. unsecured short-term debt | |
| 126. |
Which of the following is not a spontaneous source of short-term funds ? |
| A. | trade credit, |
| B. | accrued expenses, |
| C. | provision for dividend, |
| D. | all of the above. |
| Answer» C. provision for dividend, | |
| 127. |
Concept of Maximum Permissible Bank finance was introduced by |
| A. | kannan committee |
| B. | chore committee, |
| C. | nayak committee, |
| D. | tandon committee. |
| Answer» D. tandon committee. | |
| 128. |
In India, Commercial Papers are issued as per the guidelines issued by |
| A. | securities and exchange board of india, |
| B. | reserve bank of india, |
| C. | forward market commission, |
| D. | none of the above. |
| Answer» B. reserve bank of india, | |
| 129. |
Commercial paper are generally issued at a price |
| A. | equal to face value, |
| B. | more than face value, |
| C. | less than face value, |
| D. | equal to redemption value |
| Answer» C. less than face value, | |
| 130. |
Which of the following is not applicable to commercial paper |
| A. | face value |
| B. | issue price |
| C. | coupon rate |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 131. |
The basic objective of Tandon Committee recommendations is that the dependence of industry on bank should gradually |
| A. | increase, |
| B. | remain stable |
| C. | decrease |
| D. | none of the above |
| Answer» C. decrease | |
| 132. |
Cash discount terms offered by trade creditors never be accepted because |
| A. | benefit in very small |
| B. | cost is very high |
| C. | no sense to pay earlier |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 133. |
In lease system, interest is calculated on |
| A. | cash down payment |
| B. | cash price outstanding |
| C. | hire purchase price |
| D. | none of the above |
| Answer» B. cash price outstanding | |
| 134. |
A short-term lease which is often cancellable is known as |
| A. | finance lease |
| B. | net lease, |
| C. | operating lease, |
| D. | leverage lease |
| Answer» C. operating lease, | |
| 135. |
Which of the following is not a usual type of lease arrangement? |
| A. | sale & leaseback, |
| B. | goods on approval, |
| C. | leverage lease, |
| D. | direct lease |
| Answer» B. goods on approval, | |
| 136. |
Under income-tax provisions, depreciation on lease asset is allowed to |
| A. | lessor |
| B. | lessee |
| C. | any of the two, |
| D. | none of the two |
| Answer» A. lessor | |
| 137. |
A lease which is generally not cancellable and covers full economic life of the asset is known as |
| A. | sale and leaseback, |
| B. | operating lease |
| C. | finance lease, |
| D. | economic lease |
| Answer» C. finance lease, | |
| 138. |
Lease which includes a third party (a lender) is known as |
| A. | sale and leaseback |
| B. | direct lease, |
| C. | inverse lease, |
| D. | leveraged lease |
| Answer» D. leveraged lease | |
| 139. |
One difference between Operating and Financial lease is: |
| A. | there is often an option to buy in operating lease |
| B. | there is often a call option in financial lease. |
| C. | an operating lease is generally cancelable by lease |
| D. | a financial lease in generally cancelable by lease. |
| Answer» C. an operating lease is generally cancelable by lease | |
| 140. |
From the point of view of the lessee, a lease is a: |
| A. | working capital decision, |
| B. | financing decision, |
| C. | buy or make decision, |
| D. | investment decision |
| Answer» B. financing decision, | |
| 141. |
For a lesser, a lease is a |
| A. | investment decision, |
| B. | financing decision, |
| C. | dividend decision |
| D. | none of the above. |
| Answer» A. investment decision, | |
| 142. |
Which of the following is not true for a "Lease decision for the lessee? |
| A. | helps in project selection |
| B. | helps in project financing |
| C. | helps in project location |
| D. | all of the above. |
| Answer» B. helps in project financing | |
| 143. |
Risk-Return trade off implies |
| A. | minimization of risk, |
| B. | maximization of risk, |
| C. | ignorance of risk |
| D. | optimization of risk |
| Answer» D. optimization of risk | |
| 144. |
Basic objective of diversification is |
| A. | increasing return, |
| B. | maximising return, |
| C. | decreasing risk, |
| D. | maximizing risk. |
| Answer» C. decreasing risk, | |
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